Credit cards have a bad reputation, especially for consumers carrying big balances with high interest rates. Are there benefits to using credit cards? Definitely. You can accumulate points to earn rewards and free miles, and defer payment for a few weeks or a month. In a recent NextAdvisor.com survey, 46 percent of people who prefer to make purchases using a credit card said they do so because of the rewards. But remember, these options will only benefit you if you can afford to pay off your balance in full by the end of the month.
Here are the six best things you can charge on your credit card.
- Travel. When it comes to booking flights, hotels, rental cars, and other vacation costs, credit cards can help you rack up plenty of points or airline miles—that can then be used towards flights, upgrades, and hotel stays. They also offer certain benefits and perks including concierge services, travel insurance, rental car insurance, lost luggage insurance, and access to nicer airport lounges. (Remember you can use these benefits only if you booked your trip using the card.) If your credit card is stolen, you can alert the company to dispute and void the charges. Some credit cards offer more favorable exchange rates when traveling internationally, but you’ll have to weigh the benefits and convenience of any credit cards that tack on a foreign transaction fee of 3 percent on top of the purchase price.
- Online purchases. Credit cards can offer better protection against fraud. That may be why 50 percent of the consumers in the NextAdvisor survey like to pay for online purchases using a credit card. Just make sure you are not using public Wi-Fi or a public computer to make purchases online. Look for secure sites before purchasing online.
- Appliances and Electronics. When it comes to big-ticket items like computers, laptops, refrigerators, washers and dryers, credit cards can offer you extended warranties, price protection, and return protection. It pays to check just which services your particular card offers. Some MasterCard, Citibank and Discover cards offer a “price rewind” service, so if something goes on sale after you already bought it, the credit card company will reimburse you the difference. Many of these perks have time limits, though, and require that the lower-priced item be the exact same make and model as the original you bought.
- Fragile and breakable items. Buying a new laptop or cell phone? Some credit cards offer extended warranties for purchases or replacement services in case that gadget gets broken. Some will even double the manufacturer’s warranty on an item for up to a year, eliminating the need for buying an extended warranty from the store.
- Special Categories such as Gas, Groceries, and Dining Out. Many credit cards offer cash-back rewards or multiplier rewards for certain categories in a particular month or quarter. For instance, dining out in May can double or triple your points in a rewards program, or increase the amount of cash you get back. Don’t forget to activate these promotions.
- Automatic payments. If there’s a dispute, say you’ve been billed twice by a company, you have proof of payment. And if you need to halt payments for any reason, a call to your credit company will take care of that and likely credit your account for any fraudulent or erroneous charges right away.